I'm not an expert in the oil business, but something just doesn't make sense to me here. The government says U.S. crude prices are expected to average $56.62 a barrel this summer -- up from $41.12 for the same period last year. That's roughly a 37% increase.
What I'm not hearing anyone say is why.
For years if gas jumped a dime a gallon the talking heads were all over it -- blaming it on tension with Iraq, cuts in OPEC production, threats from Iran, whatever. Here we are with gas averaging $2.31 a gallon, and I'm not seeing a lot of explanation. There's no alarm about the economic effects, either. In fact, the media seems to be going in the opposite direction by saying it's not affecting drivers and saying that gas prices aren't so bad when corrected for inflation.
I'll admit that there's statements about increased demand and lack of refining capacity. But this summer's gasoline consumption is only expected to be 1.8 percent greater than last year. Refining capacity will exceed last year's by 0.5 percent. There's talk about Asia's increasing demands affecting things, but 37 percent in a year?
It used to be if gas went up a dime the nation was in an uproar, politicians were fired up, and the media was full of talk about how much damage it would do to the economy. None of that appears to be happening. I'll admit I've been out of the country for a few months, but am I missing something?